Phillips v. Mirac, Inc

685 N.W.2d 174, 470 Mich. 415
Michigan Supreme Court·Decided July 6, 2004·No. Docket 121831·Published·Cited by 125 cases

Opinions

TAYLOR, J.

In this case, we granted leave to appeal to consider whether MCL 257.401(3), which caps the amount of a lessor’s liability in motor vehicle leases of thirty days or less, violates plaintiffs rights under the Michigan Constitution to a jury trial,1 equal protection,2 or due process.3 We hold that this damages cap does not implicate plaintiffs right to a jury trial, and does not violate her rights to equal protection or due process. Therefore, we affirm the Court of Appeals decision that the statute is constitutional.

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Regeana Diane Hervey died in an automobile accident while a passenger in a vehicle being driven by Da-Fel Reed. Reed had leased the vehicle from Mirac, [420] doing business as Enterprise Rent-A-Car. Margaret Phillips, decedent’s mother and the personal representative of decedent’s estate, initiated a lawsuit against Mirac on the basis of MCL 257.401(3).4 Generally, MCL 257.401(3) establishes vicarious liability for automobile lessors when permissive users, such as Reed, are negligent and cause automobile accidents injuring others. The act also caps the damages for such lessors at $20,000 for each injured person to a maximum of $40,000 for each accident.

While reserving for resolution the constitutionality of the damage caps, the parties before trial executed a “high-low” agreement for a $150,000 minimum award and a $250,000 maximum award. The jury returned a verdict of $900,000 against Mirac. This would, of course, have been reduced to $250,000 pursuant to the high-low agreement, unless the statutory damage caps were constitutional, in which case the damages would be reduced to $20,000.

The trial court concluded that the damage caps were unconstitutional on the basis that the statute, in capping damages, violated the right of trial by jury found in art 1, § 14 of the Michigan Constitution. The essence of its holding was that the right of jury trial includes the right of having a jury not only determine damages, but that the jury’s determination cannot be altered by the Legislature or courts. The trial court also concluded that the statute violated the Michigan Constitution’s provision that guarantees to citizens equal protection of the laws.5 That is, that it impermissibly causes similarly situated litigants to be treated differently. Using the same reasoning, the trial court concluded that the [421] statute also violates the Michigan Constitution’s guarantee of due process of law.6

On appeal, the Court of Appeals reversed in a two-to-one opinion.7 The majority determined that the cap did not infringe plaintiffs right to trial by jury for two reasons. First, because the Legislature can abolish or modify common-law and statutory rights and remedies, it necessarily follows that it can limit the damages recoverable for a cause of action. Second, it decided that the statute does not infringe the right to a jury trial because the damages cap does not remove from the jury the determination of facts and amount of damages. The statute simply limits the amount of damages that can be recovered from a lessor of vehicles. Thus, the cap only limits the legal consequences of the jury’s finding. 251 Mich App at 590-595.

Therefore, having determined that the cap did not implicate any fundamental right, the majority analyzed whether the cap violates plaintiffs right to equal protection under the rational basis test. The majority concluded that “it can reasonably be assumed that Michigan has a legitimate interest in the continued operation of automobile rental businesses, and protecting those businesses from large damages awards injury trials bears a rational relationship to that end.” Id. at 598. Therefore, the statute did not violate plaintiffs equal protection rights. Similarly, because the tests for due process and equal protection are essentially the same, the cap also did not violate plaintiffs due process rights. Id. at 598.

The Court of Appeals dissent would have held that the damages cap is unconstitutional because it violates [422] the right to a jury trial. The dissent explained that “[bjecause our constitution confers a right to trial by jury, and because the right to trial by jury in Michigan extends to a determination of damages, the damages cap in the instant case is unconstitutional.” Id. at 599. Thus, the statutory damages cap renders the jury’s role illusory. The dissent stated that the Legislature may be free to abolish a cause of action, but it may not abolish a right mandated by the Constitution. Id. at 600.

This Court granted plaintiffs application for leave to appeal, “limited to whether MCL 257.401(3) constitutes an unconstitutional denial of plaintiffs right to a jury trial, equal protection, or due process.”8

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When construing a constitutional provision, we must give the words their plain meaning if they are obvious on their face. “If, however, the constitutional language has no plain meaning, but is a technical, legal term, we are to construe those words in their technical, legal sense.” Silver Creek Drain Dist v Extrusions Div, Inc, 468 Mich 367, 375; 663 NW2d 436 (2003); Michigan Coalition of State Employee Unions v Civil Service Comm, 465 Mich 212, 222-223; 634 NW2d 692 (2001), quoting 1 Cooley, Constitutional Limitations (8th ed), p 132.

The constitutionality of a statute is a question of law that is reviewed de novo. Tolksdorf v Griffith, 464 Mich 1, 5; 626 NW2d 163 (2001). Statutes are presumed constitutional. We exercise the power to declare a law unconstitutional with extreme caution, and we never exercise it where serious doubt exists with regard to the conflict. Sears v Cottrell, 5 Mich 251, 259 (1858); accord, [423] Taylor v Gate Pharmaceuticals, 468 Mich 1, 6; 658 NW2d 127 (2003). “Every reasonable presumption or intendment must be indulged in favor of the validity of an act, and it is only when invalidity appears so clearly as to leave no room for reasonable doubt that it violates some provision of the Constitution that a court will refuse to sustain its validity.” Cady v Detroit, 289 Mich 499, 505; 286 NW 805 (1939).

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The statute at issue in this case, MCL 257.401, provides in part:

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Phillips v. Mirac, Inc, 685 N.W.2d 174, 470 Mich. 415 (Mich. 2004).

685 N.W.2d 174 (Phillips v. Mirac, Inc) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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